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DECREE

ON THE AMENDMENT, SUPPLEMENT OF SEVERAL ARTICLES OF THE DECREE NO. 79/2002/ND-CP DATED 4 OCTOBER 2002 OF THE GOVERNMENT ON ORGANIZATION AND OPERATION OF FINANCE COMPANIES

THE GOVERNMENT

- Pursuant to the Law on the Government's organization dated 25 December 2001;

- Pursuant to the Law on the State Bank of Vietnam No. 01/1997/QH10 dated 12 December 1997 and the Law on amendment, supplement of several articles of the Law on State Bank of Vietnam No. 10/2003/QH11 dated 17 June 2003;

- Pursuant to the Law on Credit Institutions No. 02/1997/QH10 dated 12 December 1997 and the Law on amendment, supplement of several articles of the Law on Credit Institutions No. 20/2004/QH11 dated 15 June 2004;

- Pursuant to the Law on Enterprises No. 60/2005/QH11 dated 29 December 2005;

- Upon the proposal of the Governor of the State Bank of Vietnam,

DECREES:

Article 1. To amend, supplement several articles of the Decree No. 79/2002/ND-CP dated 4 October 2002 of the Government on organization and operation of Finance Companies as follows:

1. Article 2 shall be amended, supplemented as follows:

"Article 2. Definition of Finance Company

1. A finance company shall be a form of non-banking credit institution, which performs the function of using own capital, mobilized capital and other capital sources for lending, investment, supply of financial and monetary consultancy services and for the implementation of several other services in accordance with provisions of applicable laws, but is not permitted to perform payment services, and receive deposits with the term of less than one year.

2. A finance company also includes the form of a general finance company which is entitled to perform all functions, operations in accordance with applicable provisions and the form of a specialized finance company which mainly engages in some sectors such as: consumer credit or credit card issuance and other activities in accordance provisions of applicable laws, of this Decree and guidance of the State Bank of Vietnam."

2. Article 3 shall be amended, supplemented as follows:

"Article 3. Form of establishment

1. A finance company shall be established and operate in Vietnam under following forms:

a. A limited liability finance company with 2 members and more;

b. One member limited liability finance company;

c. Joint stock finance company

2. The change of ownership, transformation of form (type) of the finance company shall be performed in accordance with applicable provisions of the State Bank of Vietnam."

3. To supplement paragraphs: 3, 4, 5, 6,7, 8 and 9 to Article 6 as follows:

"Article 6. Interpretation

3. Foreign credit institution includes banks, finance companies, finance groups which are established in accordance with foreign laws.

4. Joint venture finance company means the finance company established in Vietnam by contributed capital of Vietnamese Party (including one or several credit institutions, enterprises of Vietnam) and of Foreign Party (including one or several foreign credit institutions) on the basis of a joint venture contract, of which the contributed capital by foreign party does not exceed 49% of charter capital of the finance company, the contributed capital of a Vietnamese enterprise does not exceed 30% of the contributed capital by Vietnamese party. Joint venture finance company is established in the form of a limited liability company with 2 members and more.

5. 100% foreign owned finance company is the finance company established in Vietnam, of which 100% charter capital owned by one or several foreign credit institutions. 100% foreign owned finance company is established in the form of a limited liability company.

6. Consumer credit is a form of granting credit to individual via such operations as: lending for installment purchase, credit card issuance and lending in money in accordance with applicable provisions of the State Bank of Vietnam.

7. Home country for a foreign credit institution means the country where the foreign credit institution is established.

8. Subsidiary company: a company shall be considered as a subsidiary of the finance company if it satisfies one of following conditions:

a. It has over 50% of charter capital belonging to the ownership of the finance company

b. The appointment of majority or all of members of its Board of Directors and General Director (Director) is subject to the decision of the finance company.

c. The amendment of, supplement to the Charter of the subsidiary company is subject to the decision competence of the Finance Company."

4. Paragraph 2 of Article 8 shall be amended as follows:

"Article 8. Conditions for the issuance of license

2. Besides the conditions mentioned in Paragraph 1 of this Article, the foreign credit institution to a joint-venture finance company or 100% foreign owned finance company is required to satisfy following conditions:

a. To be permitted by authorities to establish and operate in Vietnam in accordance with applicable provisions of its home country's laws;

b. Its total assets are over USD 10 billion by the end of the year prior to the time of application, unless otherwise provided for by Bilateral Investment Agreement between Vietnam and its home country."

5. To replace Article 14, 15 and 16 by new Articles 14, 15 and 16 as follows:

"Article 14. The opening of branch, representative office and establishment of subsidiary company

1. The opening and operation termination of a domestic, oversea branch, representative office of the Finance Company must be approved in writing by the State Bank of Vietnam. Conditions regarding application file, procedures for opening and operation termination of the branch, representative office of a finance company shall be in accordance with Article 33 of the Law on Credit Institutions and guidance of the State Bank of Vietnam.

2. A finance company shall be entitled to establish its subsidiary for engaging in areas of finance, banking, insurance, securities. The establishment of the subsidiary of the finance company shall be performed in accordance with applicable provisions of the State Bank.

Article 15.

1. Board of Directors

a. Function of the Board of Directors is to manage Finance Company, to make decision at its own discretion on behalf of the Finance Company, to perform rights and obligations of the Finance Company, except for issues subject to the authority of Shareholders' General Assembly (for joint stock finance company) or of owner (for one member limited liability finance company) or of capital contribution members (for limited liability finance company with 2 members and more).

b. Board of Directors shall consist of at least 3 members, including prestigious persons who possess professional ethics, are knowledgeable about finance, banking activity. Chairman and other members of Board of Directors shall not be entitled to authorize any person who is not member of the Board of Directors to perform their duties, authorities.

c. Term of Board of Directors and of its member shall be from 3 to 5 years according to the specific provisions in the Charter of Finance Company. Where a member of Board of Directors is additionally elected or elected as substitute for a member who is dismissed, relieved from office in the middle of his term, then the term of the additional or substitute member shall be the remaining period of the Board's term. Member of Board of Directors may be reelected with unlimited number of terms and may be dismissed, relieved from his office at any time upon the decision of the agency competent to elect, appoint or nominate.

d. Board of Directors shall use the seal of the Finance Company for performing its duties.

2. Controllers Committee

a. Controllers Committee shall be responsible for examining financial activity; supervising the compliance with the accounting regime, prudential ratio in the operation of the Finance Company, performing the internal audit regime from time to time, for each sector in order to make accurate assessment for business activity and financial situation of the Finance Company.

b. Controllers Committee shall consist of at least 3 persons, of which at least one person is Chief of the Committee and at least a half of members of the Committee are specialized and responsible Controllers. Controllers must satisfy requirements of professional standard and professional ethics stipulated by the State Bank.

c. Controllers Committee has its assistant body and is entitled to use the internal inspection and control system of the Finance Company to perform its duties.

d. Term of Controllers Committee and of its member shall be from 3 to 5 years according to the specific provisions in the Charter of Finance Company. Where a Controller is additionally elected or elected as substitute for the Controller who is dismissed, relieved from office in the middle of his term, then the term of that additional or substitute controller shall be the remaining period of the Committee's term. Controllers may be reelected with the unlimited number of terms.

3. General Director (Director)

a. Board of Directors shall appoint one of its members as General Director (Director) or outsource a General Director (Director). General Director (Director) of the Finance Company shall be responsible to Board of Directors for the management of daily activities based on his duties, authorities in line with provisions of this Decree and other provisions of applicable laws. General Director (Director) shall be legal representative of the Finance Company unless otherwise provided for in the Charter of Finance Company.

b. Term of General Director (Director) shall not be in excess of 5 years as specifically stipulated in the Charter of the Finance Company. General Director (Director) may be reappointed with the unlimited number of terms.

c. General Director (Director), Deputy General Director (Deputy Director) of the Finance Company must satisfy standards as provided for in Paragraph 2, Article 39 of the Law on Credit Institutions.

d. General Director (Director) of the Finance Company shall not be permitted to be General Director (Director) or Chairman of Board of Directors of another credit institution, except for case where that credit institution is a subsidiary of the Finance Company.

đ. Board of Directors shall provide in details for the structure, functions, duties of the assistant body to General Director (Director).

Article 16. State Bank shall provide specific guidance on functions, duties, authorities and mode of election, appointment, dismissal, approval of members of Board of Directors, of Controllers Committee and General Director (Director) of the Finance Company.

6. To replace Paragraph 2 and supplement Paragraph 5 to Article 17 as follows:

" Article 17. Modes of capital mobilization

2. To issue bond, deposit certificate and other valuable papers with the term of one year and more to mobilize capital from domestic and foreign organizations and individuals under applicable provisions of State Bank of Vietnam.

5. Finance Companies which are specialized in consumer credit, card area shall not be entitled to perform the capital mobilization as stated in Paragraph 1 of this Article."

7. To supplement Paragraph 4, Article 18 as follows:

"Article 18. Lending

4. For specialized Finance Company

a. The Finance Company engaging in consumer credit area, shall be entitled:

- To extend consumer credit in the form of lending for installment purchase, credit card issuance and lending in money;

- To supply services of finance, banking, monetary, consumer investment consultancy to customers

- Other forms in accordance with provisions of the State Bank.

b. Finance Company engaging in card area shall comply with provisions in the Decree No. 64/2001/ND-CP dated 20 September 2001 of the Government on payment activity through payment services suppliers and guidance of the State Bank, provided that revenue of credit card issuance shall not be less than 70% of the Company's revenue."

8. To replace Paragraph 1 of Article 25 as follows:

"Article 25. Operations that must be permitted by the competent State agencies

Foreign exchange activity: Finance Companies shall be entitled to supply some foreign exchange services in accordance with provisions of applicable laws and guidance of the State Bank of Vietnam."

Article 2. Implementing provisions

1. This Decree shall be effective after 15 days since its publication in the Official Gazette;

2. State Bank of Vietnam and related ministries, industries shall be responsible for providing guidance on the implementation of this Decree.

3. Ministers, Heads of Ministerial Level Agencies, Heads of Government's agencies, Chairman of People's Committee in provinces, cities under the central Government's management shall be responsible for the implementation of this Decree.